Interview with John Yates

August 31, 2002

LE: Having recently interviewed your co-chairman, Nigel Miller, I thought it was time for SCL members to find out about you and to talk to you about your plans for SCL. I want to start by asking you some more personal questions? How did you get into IT law?

JY: To some extent I ended up doing IT law by accident – and my interest in climbing played a part in this just as it has in many other areas of my life. At Leeds University – which I picked partly because of it’s proximity to good climbing areas and partly because it had a strong climbing club – I was studying Chemical Engineering but had begun to find that degree course did not grasp my attention. I had a friend in the climbing club who did Law and it seemed to be a soft option so I switched to Law. My friend had given me the impression that Law was relatively cushy – and I have to say that by comparison with Chemical Engineering it was. After Leeds, I maintained my interest in law and did a BCL at Oxford and then went to do a pupilage.

The pupilage was with Anthony Thornton, now a judge in the Technology and Construction Court, and his work included a great deal of construction and engineering work as the chambers were specialists in that area. Given my pre-law background, I was more technically aware than most of my contemporaries at the Bar. Although the Bar did not turn out to be for me, I still reflect on some of the lessons I learnt at that stage: Thornton was very clear and direct in his advice to clients and this contrasted with the neutral, or very often wishy-washy, advice which many lawyers protected themselves by giving. Thornton believed that clients paid for his opinion so he gave it.

LE: I had not realised that you were at the Bar. Why did you not pursue that?

JY:I did not stay at the Bar for two reasons – it was partly financial in that I did not have the normal background to support me and partly a simple lack of motivation to be an advocate.

I looked around for new jobs and perhaps because of the technical experience I had acquired I managed to line up a job with IBM as a Legal Adviser. I had a most memorable first day since I broke my leg on the way in to work in a motorcycle accident (it was all my fault) and actually started some two weeks later. It may have been a blessing in disguise because I limped around with my leg in plaster for five months (it was a particularly bad break) and that no doubt made me more visible and memorable than the ordinary new employee.

Those were halcyon days for IBM. They were selling loads of main-frames and were highly profitable. Working there involved a big lifestyle change – from impecunious Bar student to global business executive. There were lots of positives in the experience – I was given lots of responsibility and also learned a great deal about commercial realities which has stayed with me throughout my career. For example, I saw that sales people were not merely people who had the gift of the gab but that they put in a great deal of thought and research before going through the selling process – they devoted a great deal of attention to what it was their customer wanted. On the down side, it was a very bureaucratic organisation and we had to follow US policy throughout. That could be galling when the US had little understanding of the European situation.

From being IBM’s legal advisor, or at least one of them, I moved on in December 1987 to take up a job with Theodore Goddard. They already had a small IT department under Robin Preston. I was the first outside lawyer they recruited. At that time IT law was not a big part of their practice – but then nor was it a big part of any firm’s practice. I really enjoyed working there with Robin Preston and later with Hilary Newiss. The technology group at Theodore Goddard became known as the lunch club because we devoted a great deal of attention to the preparation of seminars and brochures and we were very much in the forefront of marketing. The group just grew and grew with David Barrett recruited from IBM and Michael Rhodes, Chris Boyle and Julian Gingell all recruited and going on to become major figures in IT law in the UK.

LE: How long did you stay there and why did you leave?

JY: I stayed there until 1993. By that time I’d developed a particular interest in disputes and had re-branded myself as a litigator. I took on lots of complex cases and became a partner there but I felt that I had “ticked that box” and that there was never going to be an opportunity to have a decisive influence on the way in which the firm developed – it was simply too big. There were also substantial family reasons behind the decision to move on – I had a young family and was not only working a long day but was involved in a very substantial amount of commuting. But, as I hinted earlier, climbing was a reason for going too. I knew that by moving north there would be substantially greater opportunities to indulge my climbing passion, and also I believe an overall improvement in the quality of life for the family.

LE: So did you just throw yourself on to the job market and hope?

JY: No, I gave considerable thought to what it was I wanted to do if I was going to leave Theodore Goddard. It may have lost a lot of its freshness working there – but it was still a very good place to work.

I decided that I wanted to work in a firm that did not already have an established IT law department. I saw problems in moving into a firm which did have such a department; I could not see me working comfortably as number two and decided that what I needed was “a greenfield site”.

I had worked with Oxley and Coward on an outsourcing deal and had enjoyed working with Peter Lee, the senior partner. I confess that previously, like most City lawyers, I had looked down my nose at non-London practices but they were genuinely impressive. They also had a strong health service client base and I thought this would lead to those clients spending on advice relating to IT law. I wasn’t then expecting to service clients based in London and the South-East for this was the pre-Internet days. It turned out that it was entirely wrong to think I could market through existing clients and it was only through a large stroke of luck that I met up with a representative from CSC (Computer Sciences Corporation) and was instructed by them in relation to a massive outsourcing deal involving British Aerospace worth £1 billion. That work more than tided us over in the IT department (which was pretty much just me) and other clients began to come in. I began working with others in Oxley and Coward, initially Rosemary Downs, and by 1996 we were getting a number of other partners involved. We got work in all manner of ways – for example, previous contacts may have moved jobs and referred matters to me. By the time I left we were turning over a million pounds worth of IT-related business – this may not sound like much to the London firms but it is a lot of high quality work for Rotherham firms.

LE: Did you have the sort of level of control that you had hoped for when working there?

JY: I got lots and lots of hands-on management experience at OxCow. I had to prepare budgets and deal with revenue and marketing matters and had a very free hand on how we did things.

The IT department were innovators in that we devoted a great deal of attention to account management and this involved applying a good deal of non-chargeable time to each file and the creation of structured relationships with clients. This structured relationship management allowed us not just to react to events but to be able to anticipate work and potential problems and was greatly valued by the clients in the IT industry.

LE: It sounds idyllic – but I know that there were sufficient difficulties for you to decide to create v-lex.

JY: There were frustrations which I suppose arose from clashes in culture. My team were enthusiastic, motivated and hard-working but some parts of the firm were resistant to the sort of change that seemed necessary for us to work effectively. Those frustrations were the catalyst for setting up v-lex.

LE: I know v-lex is an incorporated law firm but what seems to me to make it different from most such firms is that you make your corporate status very obvious – indeed it’s not immediately obvious you are lawyers when visiting your Web site.

JY: We chose a name that had a vague legal connection – “lex” as in law and I suppose the “v” stands for virtual – and we went for a corporate image that looked good on the Web. We incorporated because partnership can be frustrating and I always wanted to recruit non-lawyers to the firm – although Chris Moffat is the only non-lawyer we’ve had on our payroll (he is an outsourcing expert and we also wanted his management expertise.)

We are essentially a niche technology law firm; 80% of our fee income is from technology businesses and the balance is mainly from buyers of IT services who buy on a truly large scale. We don’t do property, tax or patents but we do do a range of work within our market. We have, in addition to our straightforward legal advice services, developed a training business.

LE: That is unusual. What does it involve?

JY: We teach IT businesses about addressing the sort of problems that can become legal problems. We look at their business approach with a view to improving their sales process – so as to avoid disputes in the future.

It is one aspect of a different approach. What most lawyers do, traditional lawyers, is to concentrate on the boiler plate in a contract. We are a very schedule-driven firm. In my view, in the typical contract the meat is in the schedules – eg the implementation plan, dependencies. These matters, which are specified in detail in the schedules, need to dove-tail with the boiler plate but we often find it is most useful to work from the back-end in – ie establish the schedules and then work out the boiler plate.

LE: Do you find the businesses to which you provide training services refer matters to you promptly – or are they a bit afraid of telling teacher that they have done something wrong?

JY: No, I don’t find that they are intimidated from approaching us – quite the opposite. The training services have helped us to get involved earlier in disputes, or areas where disputes loom, and that has obvious benefits for us and our clients.

LE: What format do the training courses take?

JY: Each training course is tailored to the client. They now are of substantial importance to us and account for about 7% of our fee income. For example, six tailored workshops might be held on the client’s premises and that would cost roughly £25,000 but can work out as only £250 per head.

LE: What sort of work do you do personally?

JY: We are now doing a lot of work on the edge of law and moving more towards consultancy. There is a strong element of project management in what I do. The sort of work I have in mind is typified by a recent task which involved taking a contract developed in the US and adapting it for Europe in the context of outsourcing in life sciences. We had to create a template which was usable throughout Europe but which allowed for all the various nuances in the various jurisdictions to be taken account of.

LE: You were described to me recently as more of a business man than a lawyer. Are you flattered by that?

JY: To some extent, yes. I certainly apply a commercial judgement when people come to me for legal advice. I have been known to give “advice’ which amounts to “this deal sucks”. Some clients think that a lawyer should keep to legal advice but most welcome that sort of grasp of commercial reality.

I certainly think that I have taken a business-like approach to costs. Clients like us to be involved in planning cases and taking account of their needs – and are enthusiastic about us offering certainty over fees (as far as it is possible to give that). We do a lot of planning on cost estimating and we have very few clients where we don’t have a work plan and budget – some even operate on a fixed price.

LE: I know from long experience from working with you on the magazine about your grasp on IT law but what about IT applications. Do you find that you are much involved in matters relating to IT applications in the law office?

JY: A very limited amount of my time is devoted to IT applications. Of-course I use technology on a daily basis. We use Pilgrim practice management in our firm and I intend to devote some time to getting more out of that because I think it has a real business potential for us. Of-course I devoted a lot of time to IT applications when we were first established but even then I have to admit that the practice manager made most of the decisions. Our firm operates using the standard MS Office products and my role was more in relation to the budgets for technology than in relation to decisions on what was the best software. In addition we were fortunate to have Hazel Raw who has real expertise in relation to Web sites so all I had to do was offer opinions rather than having to become involved in detailed areas

LE: I am sure it must give you some additional advantage to be married to your firm’s IT manager!

Let’s turn now to SCL and your aims for your period of office.

JY: It is very much a team effort and we have aims as a team of trustees. I think the new trust board and our adoption of proper line management roles for trustees (so that each has a specified function) has limited my role as joint chairman. I know that previously the chairman tended to do most things. Now each trustee has different and defined duties.

LE: Do you find that your duties overlap with Nigel Miller’s?

JY: I don’t think that we do overlap really. I deal with the group chairman. I tried to attend at least one meeting for the groups for which I have responsibility in each year (Harry Small has responsibility for some others). In fact that is one of my chief areas of interest as regards SCL. I want to stimulate much more group activity. It’s not just the magazine and the Web site that drives SCL. It’s about interaction. If we can make the groups better and make people want to attend then we will see real benefits in every aspect of SCL’s activities.

I did put in a lot of work on the Boot Camp and the more advanced IT law course (which Richard Stephens has now taken up and advanced). I think SCL has gained hugely as a result of that effort but it is not just the initial gains; organisations like SCL benefit most when things are happening – there is a snowball effect and all sorts of side-benefits can ensue.

LE: Is there a danger of IT applications being neglected?

JY: We’re all aware of the fact that membership in SCL has been static over the last few years. Without doubt, one reason is the general shift in the interest of SCL members from applications to IT law. The membership has shifted and that has had an effect on what we do and on our focus. But, while we need to listen to the people who think that we’re not paying enough attention to IT applications, I think in fact that we have moved to a more even-handed approach.

One of the reasons for static membership relates to the economic climate – although the membership fee is not a large sum of money it can add up when there are multiple members within particular firms.

But, if there is perceived “neglect”, we are certainly going to make sure that that “neglect” ceases. IT law and IT applications will get equal billing during my term of office. It is already the case that some regional groups focus largely on IT applications.

LE: And the new SCL IT in Property Group is, initially at least, largely concerned with practical issues.

JY: We are also organising a major SCL event on IT applications scheduled for the New Year – Andrew Levison is organising that and I am sure that it will be a great success. And that initiative could well be the first of many.

LE: Thank you for giving up time for the interview.